Correlation Between Pro Dex and ATRION

Can any of the company-specific risk be diversified away by investing in both Pro Dex and ATRION at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pro Dex and ATRION into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pro Dex and ATRION, you can compare the effects of market volatilities on Pro Dex and ATRION and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pro Dex with a short position of ATRION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Dex and ATRION.

Diversification Opportunities for Pro Dex and ATRION

0.47

Correlation Coefficient

Pro Dex  ATRION

Very weak diversification

The 3 months correlation between Pro and ATRION is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and ATRION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRION and Pro Dex is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pro Dex are associated (or correlated) with ATRION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRION has no effect on the direction of Pro Dex i.e., Pro Dex and ATRION go up and down completely randomly.

Pair Corralation between Pro Dex and ATRION

Given the investment horizon of 90 days Pro Dex is expected to generate 0.83 times more return on investment than ATRION. However, Pro Dex is 1.21 times less risky than ATRION. It trades about 0.03 of its potential returns per unit of risk. ATRION is currently generating about -0.01 per unit of risk. If you would invest  1,573  in Pro Dex on March 14, 2024 and sell it today you would earn a total of  413.00  from holding Pro Dex or generate 26.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pro Dex  vs.  ATRION

Pro Dex

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pro Dex showed solid returns over the last few months and may actually be approaching a breakup point.

ATRION

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATRION are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, ATRION demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pro Dex and ATRION

The main advantage of trading using opposite Pro Dex and ATRION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Dex position performs unexpectedly, ATRION can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ATRION will offset losses from the drop in ATRION's long position.

The idea behind Pro Dex and ATRION pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.